ITO WARD 3 (5), KALYAN V. RUPESH P. BHATIA, DOMBIVALI

ITA 6272/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8550 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 01-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KUMAR PADMAPANI BORA
• Keywords: Bogus purchase; Reassessment proceedings
• Section: 143(3); 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO.6272/MUM/2018(A.Y.2010-11) INCOME TAX OFFICER, WARD 3(5), 2 ND FLOOR, RANI MANSION, MURBAD ROAD, KALYAN (W) 421 301 ...... APPELL ANT VS. SHRI RUPPESH P. BHATIA C/O. S.S.SUBEY, B-WING, 03, RAMESHWAR KRUPADHAM CHS, BADASAHEB JOSHI MARG,PHADKE X ROAD, DOMBIVALI (E) 421 201 PAN:AATPB6537E ..... RESPONDENT APPELLANT BY : SHRI KUMAR PADMAPANI BORA RESPONDENT BY : SHRI N.A.KULKARNI DATE OF HEARING : 03/12/2019 DATE OF PRONOUNCEMENT : 15/01/2020 ORDER PER VIKAS AWASTHY, JM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-1, MUMBAI (IN SHORT THE CIT(A)) DATED 06/08/2018 FOR THE ASSESSMENT YEAR 2010-11. 2. BRIEF FACTS OF THE CASE AS EMANATING FROM RECORD S ARE : THE ASSESSEE IS ENGAGED IN BUSINESS OF SUPPLY OF ENGINEERING GOODS. ON THE BASIS OF INFORMATION RECEIVED FROM SALES TAX DEPARTMENT THAT THE ASSESSEE HAS 2 ITA NO.6272/MUM/2018(A.Y.2010-11) INDULGED IN PROCURING BOGUS PURCHASE BILLS AGGREGAT ING TO RS.14,13,332/- FROM HAWALA DEALERS THE ASSESSING OFFICER REOPENED TH E ASSESSMENT. IN REASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HEL D THAT THE ASSESSEE HAS MADE BOGUS PURCHASES FROM FOLLOWING PARTIES:- NAME OF HAWALA DEALER AMOUNT (IN RS.) AMI TRADERS 60,187 KOTSONS IMPEX PVT. LTD. 3,28,356 DIDDHI ENTERPRISES 3,51,720 JAI MATA DI TRADING 3,09,710 SAILEEA TRADING PVT. LTD. 87,859 SHAH ENTERPRISES 2,75,500 TOTAL 14,13,332 THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HA S FAILED TO PRODUCE THE PARTIES AND DOCUMENTARY EVIDENCE SUCH AS OCTROI REC EIPTS, LORRY RECEIPTS, ETC. AND HENCE, THE ASSESSEE HAS FAILED TO ESTABLISH G ENUINENESS OF THE PURCHASES. THE ASSESSING OFFICER MADE ADDITION OF THE ENTIRE S UCH BOGUS PURCHASES. AGGRIEVED BY THE ASSESSMENT ORDER DATED 9/2/2015 UN DER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT ), THE ASSESSEE FILED APPEAL BEFORE CIT(A). THE FIRST APPELLATE AUTHORITY AFTER CONSIDERING THE FACTS OF THE CASE, THE GROSS PROFIT/NET PROFIT OF THE ASSESSEE I N THE PRECEDING AND SUCCEEDING ASSESSMENT YEARS AND VARIOUS DECISIONS ON THIS ISSUE RESTRICTED THE ADDITION TO 25% OF THE BOGUS PURCHASES. AGAINST T HE FINDING OF THE CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 3. SHRI KUMAR PADMAPANI BORA REPRESENTING THE DEPARTME NT VEHEMENTLY SUPPORTED THE FINDINGS OF ASSESSING OFFICER AND PRA YED FOR REVERSING THE FINDINGS OF 3 ITA NO.6272/MUM/2018(A.Y.2010-11) THE CIT(A). THE LD.DEPARTMENTAL REPRESENTATIVE SUB MITTED THAT THE ASSESSEE HAS FAILED TO FURNISH DOCUMENTARY EVIDENCE AND HAS ALSO FAILED TO PRODUCE THE BILLS FROM WHOM PURCHASES WERE MADE TO SUBSTANTIATE GENUINEN ESS OF THE PURCHASES UNDER QUESTION. 4. SHRI N.A.KULKARNI APPEARING ON BEHALF OF THE ASS ESSEE SUPPORTED THE FINDINGS OF CIT(A) AND PRAYED FOR DISMISSING THE APPEAL OF REVENUE. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY RIVAL SIDE S AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. IT IS AN UNDISPUTED F ACT THAT THE REVENUE HAS NOT RAISED ANY DOUBT OVER THE SALES MADE BY THE ASSESSEE. WIT HOUT PURCHASES THERE CANNOT BE SALES. APPARENTLY, THE ASSESSEE HAS MADE PURCHASES FROM GREY MARKET AND, THEREAFTER, PROCURED BILLS FROM THE HAWALA DEALERS. UNDER SUCH CIRCUMSTANCES, THE ADDITION ONLY TO THE EXTENT OF UNDISCLOSED PROFITS FROM ALLEGED BOGUS PURCHASES CAN BE BROUGHT TO TAX. WE FIND THAT THE ORDER OF CIT( A) RESTRICTING DISALLOWANCE TO 25% OF THE ALLEGED BOGUS PURCHASES IS REASONABLE AND JU STIFIED. THE IMPUGNED ORDER WARRANTS NO INTERFERENCE, HENCE, THE SAME IS UPHELD AND THE APPEAL OF REVENUE IS DISMISSED BEING DEVOID OF MERIT. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON WEDNESDAY , THE 15 TH DAY OF JANUARY, 2020. SD/- SD/- (R.C.SHARMA) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 15/01/2020 VM , SR. PS(O/S) 4 ITA NO.6272/MUM/2018(A.Y.2010-11) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI